What Is Sectoral Mutual Fund: Top Crisil Rated Mutual Fund Ticked Upto 96% Return

Sectoral mutual fund SIPs are chosen by investors who are interested in company stocks of particular sectors. Here, the portfolio of a sectoral mutual fund SIP, which was rated with 5 star by Crisil, has been discussed.

Sectoral mutual fund investment rationale

A sectoral fund will invest in a particular sector of the economy, which that means, companies operating in a particular sector will be the target of the fund house. Sectoral funds can be volatile; those can fetch both risk and prospect. If a particular sector is performing quite well, the sectoral funds will perform well. But if a sector sees a sudden fall, investors will face major risk with the fall of the stocks. For example, sectoral funds in the pharma sector have done monumentally well during the pandemic. However, if the real estate industry falls, the sectoral funds of real estate will doom. Hence, the investors should always consider the risk quotient of the particular funds.

Real estate, utility, natural resources, pharma, technology, these sectors have many popular sectoral funds.

DSP Natural Resources and New Energy Fund - Direct Plan

DSP Natural Resources and New Energy Fund - Direct Plan is a popular SIP investment among investors, as a large and mid-cap investment. DSP Natural Resources and New Energy Fund - Direct Plan's NAV stood at Rs. 58.14. However, the fund size is Rs. 753.48 crore, while the Expense Ratio (ER) is 1.12%; the same as the category average. The ER is a bit high, which can impact your profitability negatively. Expense Ratio (ER) is the percentage, the fund house will use your money for its official management expenses.

This mutual fund SIP has been rated with 5 Star by renowned rating agency Crisil.

Absolute and annualized returns

DSP Natural Resources and New Energy Fund - Direct Plan's SIP's absolute returns are most lucrative in the long term. In the last 1-year SIP return stood at 10.77%, in the last 2 years it has fetched 53.31% returns, in the last 3 years it has given a 62.36% returns, and in the last 5 years it has fetched 66.47% returns. Annualized returns of this fund's SIP were 47.04% in the past 2 years, and 34.03% in the past 3 years.

DSP Natural Resources and New Energy Fund - Direct Plan's absolute mutual fund returns are highest in 5 years term. In the last 1 year return stood at 42.70%, in the last 2 years it has fetched 79.73% returns, in the last 3 years it has given 86.45% returns, and in the last 5 years it has given 96.11% returns. Additionally, in the past 1 year, the DSP Natural Resources and New Energy Fund - Direct Plan's annualized returns stood at 42.42%, while the category average is 23.12%. Hence, this fund has outperformed the category average return.

Portfolio

DSP Natural Resources and New Energy Fund - Direct Plan's equity holding is 74.35%, but the fund invests 25.65% in others which is quite high. The Fund's Large Cap Investments are 51.64%, Mid Cap Investments are 16.56%, Small Cap Investments are 1.33%, and 4.82% investments are allocated in other funds, among total of 19 stocks. This fund's portfolio turnover ratio is quite high at 38.00%.

The top 10 equity holdings of the DSP Natural Resources and New Energy Fund - Direct Plan's are, Reliance Industries Ltd., Tata Steel Ltd., Hindalco Industries Ltd., Jindal Steel & Power Ltd., Bharat Petroleum Corporation Ltd., GAIL (India) Ltd., Hindustan Zinc Ltd., Gujarat State Petronet Ltd., Petronet LNG Ltd., Oil & Natural Gas Corporation Ltd.

Other funds under this category are, ICICI Prudential Infrastructure Fund - Direct Plan, Aditya Birla Sun Life Digital India Fund - Direct Plan, Quant ESG Equity Fund - Direct Plan, SBI Magnum COMMA Fund - Direct Plan, etc.

(Also read:  Large & Mid-cap Mutual Fund Recorded Upto 110.16% Return: 4 Star Rated By Crisil)

Disclaimer

Investing in equities/mutual funds/SIPs poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, and the author are not liable for any losses caused as a result of decisions based on the article.

(Data mentioned as on February 8, 2022)